India's silver imports slumped to their lowest level in more than three years in May after the government tightened restrictions on imports of the precious metal and raised duties, according to official data reported by Reuters.
Imports fell 87% year-on-year to $75.57 million in May from $566.22 million a year earlier, data compiled by the Ministry of Commerce and Industry showed. In volume terms, silver imports dropped 94% from a year ago to 33 metric tonnes, the lowest level since February 2023.
Import Restrictions and Duty Hikes
The sharp decline followed a series of measures aimed at curbing precious metal imports. In mid-May, India restricted imports of silver in nearly all forms with immediate effect. Earlier this month, the government further tightened the rules by bringing silver grain and powder under the restricted category and requiring prior import authorisation.
The government has also increased import duties on gold and silver to 15% from 6% as part of efforts to contain precious metal imports and reduce pressure on foreign exchange reserves amid elevated crude oil prices.
Impact on Global Markets and Domestic Premiums
India, the world's largest consumer of silver, meets more than 80% of its demand through imports. Lower imports could weigh on global silver prices while helping narrow India's trade deficit and ease pressure on the rupee, according to market participants.
"There is demand, but imports have become difficult due to the restrictions, and local premiums have started to rise," a Mumbai-based dealer with a private bullion-importing bank told Reuters.
Historical Context and Demand Trends
India spent a record $12 billion on silver imports during the 2025-26 financial year ended March, compared with $4.8 billion in the previous year. Silver is used in India for jewellery, coins, bars and a range of industrial applications, including solar energy and electronics. Over the past year, demand has been driven largely by investment purchases rather than traditional jewellery and silverware consumption, with inflows into silver exchange-traded funds (ETFs) reaching a record high.
Trade Data Summary
| Metric | May 2026 | May 2025 | Change |
|---|---|---|---|
| Import value | $75.57 million | $566.22 million | -87% |
| Import volume | 33 metric tonnes | ~550 metric tonnes (estimated) | -94% |
| Import duty | 15% | 6% | +9 pp |
Note: Volume for May 2025 is estimated based on 94% decline from 33 tonnes.
India primarily imports silver from the United Arab Emirates, the United Kingdom and China.
Implications for Trade Professionals
The sharp drop in silver imports signals a major shift for importers and customs brokers who must navigate the new prior authorisation regime for silver grain and powder. The 15% duty on gold and silver further raises costs for bullion importers. With India accounting for over 80% of global silver consumption, the curbs are likely to tighten local supplies and push up domestic premiums, as noted by the Mumbai dealer. Exporters of silver to India from the UAE, UK, and China may see reduced demand in the near term.
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